Vacation Pay For Terminated Employees

Written by John E. Falcone

Published: November 07, 2017

There is no Virginia statute that requires employers to pay a departing employee for accrued vacation or other leave time. The Virginia Department of Labor and Industry (DOLI), however, takes the position that the employer does have an obligation to pay for accrued leave if the employer has a policy or practice of doing so. For example, if the company’s employee handbook states that accrued vacation time will be paid upon termination of employment, the company will be bound by that policy.

To avoid uncertainty and the potential for claims to the DOLI, employers should clarify their policies in their employee handbooks about payment of accrued vacation, sick or other types of leave upon termination of employment. For example, a policy might state: “In the event of resignation, and when two weeks notice has been given, any accrued, unused vacation will be paid. Any employee who is terminated for cause will forfeit payment of unused vacation.”

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